Cell proliferation and differentiation are regulated by extracellular growth factors. Among these, transforming growth factor-beta (TGF-beta) plays a key role in growth control. Unlike growth factors that act through tyrosine kinase receptors and stimulate cell proliferation, TGF-beta inhibits cell growth and induces expression of various extracellular matrix proteins. TGF-beta is the prototype of many factors that play key roles in cell differentiation and development. The activities of TGF- beta-related proteins are mediated through a recently discovered class or receptors, the transmembrane serine-threonine kinases. Two types of receptors, the type II and type I receptors, form the functional heteromeric receptor complex. Following TGF-beta binding, the type II receptor transphosphorylates the type I receptor, leading to intracellular signaling that results in changes in gene expression. Smads have recently been identified as signaling effectors of TGF-beta receptors. Receptor activation by TGF-beta results in phosphorylation of Smad2 and/or 3, which then dissociate from the receptor and engage in a heteromeric complex with Smad4/DPC4. These Smads are then translocated into the nucleus where they activate transcription of defined genes. The TGF-beta type II receptor, Smad2 and Smad4/DPC4 all act as tumor suppressors, whose inactivation contributes to tumor development. To understand the mechanism of TGF-beta receptor signaling and the role of TGF-beta and related factors in normal and tumor development, it is essential that we understand the mechanisms of activation and action of the Smads. The goal of this research proposal is to characterize two key processes in Smad function, thereby using Smad2 and 3 and Smad4, i.e. the Smads that mediate TGF-beta receptor signaling, as models. In Aim 1, we propose to characterize the mechanisms of nuclear translocation of Smads in response to receptor activation. In Aim 2, we will characterize the mechanisms of transcriptional activation of genes by Smads in response to TGF- beta, thereby using two known TGF-beta-responsive promoters as model systems. Finally, in Aim 3, we will identify and functionally characterize proteins that associate with the TGF- beta responsive Smads. The latter studies will greatly complement and contribute to the characterization of the mechanisms of nuclear translocation of Smads and transcriptional activation by Smads. Taken together, our research program should result in the characterization of two essential key processes in Smad function and TGF-beta receptor signaling. Our findings should help us understand the role of TGF-beta receptor signaling in normal and tumor development, and in the regulation of cell growth and differentiation.